Finally some good news for those on minimum wage: the government has seen fit to increase it by 20p per hour, bringing it up to £6.70 from October this year. It’s a change that will help around 1.4 million hard working people, with the added bonus that the hourly rate for young workers will also rise, including a huge 20% increase to the rate for apprentices. The new rates were highly recommended by the Low Pay Commission but the government has gone way past the suggested 7p per hour increase for apprentices.
Completely on your side…
While David Cameron has stated that these so called “across the board” increases in rates will go a long way to offering “more financial security to workers,” with “a better future” for Britain, 
Labour has claimed that the minimum wage has been “eroded” by the coalition government. However, this 3% rise in the minimum wage for adult workers is the biggest increase in seven years. The LPC advised: “The statutory minimum for 18 to 20-year-olds will also go up by 3% from October, from £5.13 to £5.30, and by 2% for 16 and 17-year-olds, taking the rate to £3.87.”
However, the government rejected the idea of a mere 7p per hour increase for apprenticeship rates, instead raising it by 57p per hour. The new rate is applicable to apprentices aged 16 – 18 and those aged 19 and over in their first year – all other apprentices are entitled to the national minimum wage for their respective age brackets.
When announcing the changes, the Prime Minster stated: “At the heart of our long-term economic plan for Britain is a simple idea – that those who put in should get out, that hard work is really rewarded, and that the benefits of recovery are truly national. That’s what today’s announcement is all about, saying to hardworking taxpayers: this is a government that is on your side. It will mean more financial security for Britain’s families and a better future for our country.”
Political roundabout
Labour, however, has promised to increase the minimum wage to £8 per hour over the course of the next parliament, assuming they win in May. Speaking about the government’s announced increases, Shadow Business Secretary Chuka Umunna said:
“This 20p rise falls far short of the £7 minimum wage which [Chancellor] George Osborne promised over a year ago. Ministers have misled working families who have been left worse off. Where under David Cameron we’ve seen the value of the minimum wage eroded, we need a recovery for working people.”
The Director-General of CBI, John Cridland, said it’s a “positive” step that the government has followed the recommendations made by LPC when it comes to adult and youth hourly rates, but that it was “disappointing” the coalition had decided to increase the apprentice rate by far more than suggested.
Frances O’Grady, General Secretary of the TUC, said the increase is “nowhere near enough to end in-work poverty” and should have been “much bolder.”
It remains to be seen if these increases will help sway voters, and particularly young people, in the Conservatives’ favour. But with Labour still dangling the £8 per hour carrot, these new rates – welcome as they might be – may still seem too little, too late.